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Council Tax (“IMI”)
How is the property rateable value computed?
The old regime:
The property rateable value (“VPT”) was based on the potential rental income of the property. However, due to a revolution in 1974, most of the rents were frozen and the VTP was not updated for several years. As a result, the VPT became artificially fixed and with a value far lower than its market price. This regime is still applicable to those properties which have not been evaluated under the new regime. Nevertheless, the VTP is adjusted annually according to inflation.
The new regime:
Under this new regime the VPT of the urban property (not applicable to urban or rural land) is calculated as per the equation shown below:
VPT = Vc x A x Ca x CI x Cq x Cv
Where:
VPT = Property Rateable Value
Vc = Average construction cost per square metre plus the average price per square metre of the land/plot.
A = Construction area plus the surrounding land (which includes gardens, swimming pools, etc…)
Ca = Type of usage coefficient
CI = Location coefficient
Cq = Quality and comfort coefficient
Cv = Age
Vc = Average construction cost per square metre plus the average price per square metre of the land/plot.
A = Construction area plus the surrounding land (which includes gardens, swimming pools, etc…)
Ca = Type of usage coefficient
CI = Location coefficient
Cq = Quality and comfort coefficient
Cv = Age
The Portuguese Revenue is aiming that VPT will correspond to 80% of the market value.
